SPX Technologies (SPXC) Earnings Expectations: Should You Invest?

Wall Street anticipates a year-over-year profit increase for SPX Technologies (SPXC) when it releases its earnings for the quarter ended September 2024. This widely-held consensus is crucial for understanding the company’s financial performance. Nevertheless, how the actual results stack up against these estimates can significantly influence the stock's short-term movement.

The earnings report is scheduled for release on October 30, 2024. Should the results surpass expectations, the stock may see an upward surge. Conversely, if the report falls short, a decline in stock price may occur.

Investors should note that the sustainability of any immediate price shift, as well as the future earnings outlook, hinges largely on management's discussion regarding business conditions during the earnings call. It’s also valuable to assess the likelihood of a positive earnings surprise.

Zacks Consensus Estimate

For the upcoming quarter, SPX Technologies is projected to deliver earnings of $1.38 per share, reflecting a significant year-over-year growth of +30.2%. In terms of revenue, estimates stand at approximately $500.23 million, which indicates an 11.5% rise from the previous year.

Estimate Revision Trends

The consensus earnings per share (EPS) estimate has remained steady over the last month, suggesting that analysts have not significantly altered their expectations. However, it is essential to recognize that aggregate changes may not always mirror each analyst’s individual revisions.

Earnings Whisper

Changes to estimates prior to an earnings announcement can provide insights into the company's performance. The Zacks Earnings ESP (Expected Surprise Prediction) is designed to compare the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter, giving weight to the newer estimates from analysts who have the latest information.

A positive Earnings ESP reading typically indicates a higher chance of earnings surpassing the consensus, especially when coupled with a strong Zacks Rank (#1, #2, or #3). Research indicates that stocks with such a combination achieve positive surprises about 70% of the time. On the other hand, a negative Earnings ESP doesn’t inherently suggest an earnings miss, as predicting earnings beats for stocks with a negative ESP or a poor Zacks Rank (#4 or #5) is notoriously challenging.

Current Outlook for SPX Technologies

For SPX Technologies, the Most Accurate Estimate aligns with the Zacks Consensus Estimate, signaling no deviation in analyst predictions. As such, the Earnings ESP stands at 0%. However, the stock enjoys a Zacks Rank of #2, indicating a positive outlook.

Despite this favorable rank, the combination makes it hard to confidently assert that SPX Technologies will exceed the consensus EPS estimate this time.

Evaluating Earnings Surprise History

When evaluating future performance, analysts often look at a company's past ability to meet or exceed consensus estimates. SPX Technologies has shown promise in this regard; in the last reported quarter, expectations were set at $1.26 per share, yet the company achieved $1.42, resulting in a +12.70% surprise. Over the previous four quarters, SPX exceeded consensus EPS estimates three times.

Final Thoughts

While an earnings miss or beat is just one factor in determining stock movement, many companies can still struggle despite meeting earnings expectations due to other disappointing aspects. Conversely, some gain momentum even after missing earnings. Therefore, investing in stocks anticipated to exceed earnings expectations may increase the odds of success.

In the case of SPX Technologies, the indicators suggest it may not be the strong earnings beat candidate investors might prefer. However, considering various elements will be crucial for those gauging whether to buy or avoid this stock ahead of its earnings release.

To stay informed on earnings announcements, be sure to refer to relevant earnings calendars.

Earnings, SPX, Invest